A slate of local bills passed through the Florida House on Thursday with the majority earning unanimous approval and no debate, but the local bill concerning Gainesville caused an hour of discussion, five proposed amendments and an 81-33 vote along party lines.
The bill transfers management control of Gainesville Regional Utilities (GRU) from the city commission to an independent authority appointed by the governor. The authority will consist of five members—one residential customer who lives outside the city limits, one commercial customer, and three residential customers with professional expertise in related fields like law, energy or finance.
If approved by the Senate and signed by Gov. Ron DeSantis, the bill would create the first municipal utility in Florida controlled by an independent board appointed by the governor. Of Florida’s 33 municipal utilities, six others also have an independent board, but none have governor appointees.
Rep. Yvonne Hayes Hinson, D-Gainesville, said the bill continues a decade-long attempt to wrestle control away from the city commission and open the possibility of a sale. She said other municipalities should take note.
Rep. Angela Nixon, D-Jacksonville, said officials also made her municipal utility appear financially unsteady before an attempted takeover.
“We don’t need any more hostile takeovers in the state of Florida,” Nixon said. “We see time and time again bills that are being passed where corporations have more of a say than the residents here in our say, where our governor has more of a say than the residents of our state.”
Supporters of the bill pointed to unfair charging practices. Rep. Mike Giallombardo, R-Cape Coral, said unincorporated residents outside city limits pay extra surcharges and see profits diverted to general government operations.
He said this represents a hostile takeover of the unincorporated area and called the practice of taxation without representation. The practice happens outside of Gainesville as well, he said, pointing to Miami as an example.
“We’re addressing Gainesville, but this is a statewide problem,” Giallombardo said. “I appreciate you bringing this up because this will spark us going down that hill because we need to address this.”
Hinson filed five amendments to the bill, but all failed to pass without Republican support. One would allow GRU customers to appoint an independent authority instead of the governor, and another would have allowed unincorporated customers to vote to leave GRU and join a separate utility.
She said the city has started a debt-reduction plan and noted that the Joint Legislative Audit Committee had given the Gainesville Commission until October to present the plan. She said Clemon’s decision to then file the bill and take away control was not a good-faith action.
Clemons said the state has compelling interest in all financial matters of the government subdivisions like the city of Gainesville. At $1.7 billion, He said GRU’s debt to equity ratio sits four times the number of similar utilities—a point given by a state auditor during a February audit committee meeting.
“The compelling interest is this: the decisions coming out of the city of Gainesville through the governing board currently is not in the financial well-being of the Gainesville Regional Utilities,” Clemons said in response to a question by Hinson.
He also pointed to transfers taken from GRU to fund general government services as excessive, taking millions of dollars more than the utility earned in net profits. The city of Gainesville has funded around 25% of its budget through money transfers from its utility over the past few years.
“There are people that are hurting not only in the city of Gainesville, there’s people that are hurting in the periphery,” he said, referring to the unincorporated service areas.
The Gainesville City Commission has criticized the bill unanimously and readied for its passage. At the same time, the commission continues its debt-reduction plan, aiming to eliminate $315 million in debt over the next decade. That plan includes a 55% reduction in the GRU transfer to city services, budget savings and increased rates.
The commission has expressed concerns over how the structure would work when issuing bonds and that the bill would cause a downgrade to its rating.
The bill will now proceed to the Senate. Unless pulled for individual consideration, the bill will be bundled with all other local bills for a single vote. Sen. Keith Perry, R-District 9, has co-sponsored the bill with Clemons, and Sen. Jennifer Bradley, R-District 6, who also represents Alachua County, has supported the bill.
- February 24: Panel warns GNV to make GRU changes
- February 27: GNV: All options on table to deal with debt
- March 17: Local legislators back bill to alter GRU control
- March 23: City readies lobbyists, counsel against GRU bill
- April 6: GNV votes on salaries, updated on budget freezes
- April 13: GNV faces $16M loss to general budget to lower debt
- April 19: Tallahassee committee signs off on GRU bill
- April 21: Opponents sound off on GRU bill at city meeting